Sunday, 29 January 2017

Trump's Rollback of the Neoliberal Market State

To understand what this means, here's a narrative of Trump's insurgency. It explains what he is doing and what he is likely to do. It starts with the rise of neoliberalism.

This scene captures the moment (from Fear and Loathing in Las Vegas)

The rise of Neoliberalism

Neoliberalism is an ideology of extreme free market capitalism that was popularized by Thatcher, Reagan, and Pinochet. By the end of the cold war in the 90's, it became the default economic ideology of the United States when both the Republicans and the Democrats adopted it. Neoliberalism improved the world. Unfettered access to US markets (the most valuable in the world) led to twenty plus years of rapid economic globalization that lifted billions of people out of poverty and made many countries rich. However, neoliberalism came at a cost to the US. Worse, it destroyed the only engine of prosperity and political stability in the US, the US middle class. It did this through:

Asymmetric competition. The US was, and still is, the only major nation in the world to fully embrace neoliberalism. Every other country or economic bloc, from China to the EU, has barriers in place to rig the market to create or protect good jobs at home (think: Germany, China, South Korea, Japan...). These barriers work and incomes in these countries has zoomed while US incomes stagnated.

The Neoliberal Trade (jobs out, wealth in). For decades, the US traded millions of good jobs in manufacturing and services for tens of thousands of amazing jobs on Wall Street (NY) and Silicon Valley (CA). This inflow of wealth at the topline created a sense of prosperity even though the median income and the quality of life of the middle class collapsed.

Non-cooperative elites. It didn't take long before the power and the wealth of the elites benefiting from unfettered globalization became immense. In fact, these US neoliberal elites became so powerful, they were able to completely opt out of the US system of taxation -- none of the elites, from Apple to Google to Wall Street banks/funds to the wealthiest American citizens pay taxes. With most of the wealth generated by the US immune to taxation, the US government quickly became a bankruptcy in progress ($20 trillion in debt and growing fast). Worse, this perpetual fiscal crisis eliminated any chance that government services (like in health care, retirement, etc. proposed by Bernie Sanders) could be formulated to cushion the damage done by neoliberal economics.

The Neoliberal Market State

The effects of neoliberalism put US political elites in a bind. Neoliberalism made it impossible for the US, as it had for two centuries, to grow the middle class economically anymore. The US economy didn't provide good jobs to the middle class anymore due to the neoliberal trade and it didn't have the funds to cushion the loss of income with services due to the tax avoidance of non-cooperative US elites. So, it decided to double down on neoliberal ideology by applying it to US cultural identity. Cultural neoliberalism now became the primary political good of the state. By making this shift it became what my friend Philip Bobbitt predicted in his epic 2002 book, The Shield of Achilles: a market state. A market state, in contrast to the nation-state's focus on broad economic prosperity and cultural integration, focuses on providing opportunity to the individual. Although Bobbitt couldn't articulate it fully at the time (none of us could), the US market state provided opportunity to individuals through:

Open borders. Low barriers immigration. H-1B visas and green cards galore. Citizen of the world. Work and live anywhere. Borders controls should be lax. Extreme version: sanctuary cities, illegal immigrants become undocumented immigrants

As we now know, the rise of the neoliberal market-state didn't actually solve the internal contradiction of the neoliberal economics -- that barrier free trade allows a few people to take everything at the expense of everyone else. Like its economic cousin, cultural neoliberalism only benefited a minority of Americans (particularly those already benefiting from economic neoliberalism in NY and CA) while offering nothing but increasingly acrimonious identity politics to the majority. All of this might have continued indefinitely, but for the financial crisis of 2008. That crisis set in motion a deep unrest within the majority. An unrest that powers Trump's socially networked insurgency. An insurgency that is now actively dismantling the neoliberal market state through the following:

Reversing economic neoliberalism by actively support job creation domestically like all other countries (from China to Germany). More mercantilist. Success measured in good jobs created instead of extreme wealth accrued. Trump to workers: "I'm fighting for you"

Reversing cultural neoliberalism by building strong borders, controlling immigration, and demanding integration with traditional culture. Provoking identity politics to create confusion. Trump tells his insurgency: you are "the best"

Finally, and most importantly to me, Trump isn't dismantling neoliberalism to return to the old nation-state. He's building, with the help of social networking, a new model of governance for the US. One that operates more like Russia and China does (a reactive authoritarianism).

On Brave New War

G. Gordon Liddy Show (radio)...this is a seminal book in the truest sense of the term.. way ahead of the curve... go out and buy it right now -- G. Gordon Liddy

City JournalRobb has written an important book that every policymaker should read -- Glenn Reynolds (Instapundit)

Small Wars JournalWithout reservation Brave New War is for professional students of irregular warfare and for any citizen who wants to understand emerging trends and the dark potential of 4GW -- Frank Hoffman

Scripps Howard News ServiceA brilliant new book published by terrorism expert John Robb, titled "Brave New War," hit stores last month with virtually no fanfare. It deserves both significant attention and vigorous debate... - Thomas P.M. Barnett

Chet Richards DNIJohn has produced an important book that should help jar the United States and other legacy states out of their Cold War mindset. You can read it in a couple of hours – so you should read it twice...

Washington Times / UPIRobb correctly finds the antidote to 4GW not in Soviet-style state structures such as the Department of Homeland Security, but in decentralization -- William Lind (the father of 4th generation warfare).

Robert PatersonHaving painted a crystal clear picture of how a war of networks is playing out, he comes to an astonishing conclusion that I hope he fills out in his next book.

The Daily DishJohn Robb of Global Guerrillas has written the most important book of the year, Brave New War. - Daily Dish (The Atlantic)

Simulated LaughterWell-written. Brave New War reads more like an action novel than a ponderous policy book. - Adam Elkus

FutureJackedGo buy a copy of this book. Now. If you are low on cash, skip a few lunches and save up the cash. It is worth it. - Michael Flagg

ZenPunditThe second audience is composed of everyone else. Brave New War is simply going to blow them away. - Mark Safranski

Haft of the SpearThere aren’t a lot of books that make me recall a 12-year-old self aching for the next issue of The Invincible Iron Man to hit the shelves. Well done.
- Michael Tanji

Ed ConeHis book posits an Army of Davids -- with the traditional nation state in the role of Goliath. - Ed Cone (Ziff Davis)

Shloky.comThis is the first real text on next generation warfare designed for the general population and it sets the bar high for following acts. It is smart, it is a short read, and it will change your thinking. - Shlok Vaidya

Politics in the ZerosI suggest this is something Lefties need to start thinking about now, as that decentralized world is coming. - Bob Morris